A Special Investigation conducted by the Puerto Rico Office of the Inspector General found that former government contractors and former employees of BDO Puerto Rico still have ties with the government of Puerto Rico, under new companies.
In addition, the investigation revealed that government officials may have committed ethical and legal violations in when formalizing contracts and certifying invoices.
On May 10, 2019, the OIG received a referral from the executive branch, requesting an audit of all the contracts that BDO had with the government.
This was in response to a probe by the Federal Bureau of Investigations into the contracting processes between the Department of Education, Treasury and the Health Insurance Services Administration, or ASES, as the agency is known in Spanish. The contracts were canceled in June 2019.
As a result of the commissioned investigation, it was identified that, during 2019, BDO had approximately 44 contracts for $30.3 million with entities in the executive branch.
Due to the amount of the contracts, one sample was taken per entity. The first report consists of the analysis of the contracts between BDO and the Treasury Department.
In the first part of the investigation, the OIG identified that while the government considered cancelling contracts with BDO, Treasury received, proposals that included the same professional services in May 2019.
“From an examination of the records of the contracts awarded after the cancellation of BDO contracts with Treasury, we were able to identify that the majority of former employees, who performed work and invoiced under contracts canceled by Treasury, continued their operations under contracts formalized with new companies,” the OIG stated.
The investigation revealed, in turn, that some Treasury officials were former BDO employees prior to arriving at the public agency, and after their appointments, they were directly involved in the hiring process (application, formalization, disbursements and cancellation) of the new contracted companies.
The OIG refrained from offering further details of the investigation.